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Current Project Structures and Financing Opportunities for CSP Market Uptake of Solar Thermal Electricity through Cooperation Current Project Structures and Financing Opportunities for CSP Projects Authors: Alexandra Papadopoulou, George Vasileiou, Serafeim Michas, Alexandros Flamos (UPRC) May, 2019 A report compiled within the H2020 project MUSTEC (Work Package 6, D6.3) The project has received funding from the European Union’s Horizon 2020 research and innovation program under grant agreement No 764626 This report should be cited as: Papadopoulou A., Vasileiou G., Michas S., Flamos A. (2019). “Current project structures and financing opportunities for CSP projects” Report. MUSTEC project. University of Piraeus (UPRC). Project Coordinator CIEMAT, Centro de Investigaciones Energeticas, Medioambientales y Tecnologicas Work Package Coordinator UPRC, University of Piraeus Research Center Lead Beneficiary UPRC, University of Piraeus Research Center Contributing Partners COBRA, COBRA Instalaciones y Servicios S.A ESTELA, European Solar Thermal Electricity Association ii ABOUT THE PROJECT In the light of the EU 2030 Climate and Energy framework, MUSTEC- Market uptake of Solar Thermal Electricity through Cooperation aims to explore and propose concrete solutions to overcome the various factors that hinder the deployment of concentrated solar power (CSP) projects in Southern Europe capable of supplying renewable electricity on demand to Central and Northern European countries. To do so, the project will analyse the drivers and barriers to CSP deployment and renewable energy (RE) cooperation in Europe, identify future CSP cooperation opportunities and will propose a set of concrete measures to unlock the existing potential. To achieve these objectives, MUSTEC will build on the experience and knowledge generated around the cooperation mechanisms and CSP industry developments building on concrete CSP case studies. Thereby we will consider the present and future European energy market design and policies as well as the value of CSP at electricity markets and related economic and environmental benefits. In this respect, MUSTEC combines a dedicated, comprehensive and multi-disciplinary analysis of past, present and future CSP cooperation opportunities with a constant engagement and consultation with policy makers and market participants. This will be achieved through an intense and continuous stakeholder dialogue and by establishing a tailor-made knowledge sharing network. Project information Project Number 764626 Project title Market uptake of Solar Thermal Electricity through Cooperation - MUSTEC Starting date 01/10/2017 Duration in months 36 Call identifier H2020-LCE-2017-RES-CSA iii TABLE OF CONTENTS Executive Summary .............................................................................................................................. 9 1 Introduction ................................................................................................................................ 10 2 Review of Support mechanisms for CSP Deployment ................................................................ 11 2.1 Introduction ......................................................................................................................... 11 2.2 United States of America .................................................................................................... 11 2.3 Spain .................................................................................................................................... 12 2.4 Morocco .............................................................................................................................. 13 2.5 Chile ..................................................................................................................................... 14 2.6 Israel .................................................................................................................................... 14 2.7 South Africa ......................................................................................................................... 15 2.8 GCC Countries ...................................................................................................................... 15 3 CSP Value Chain and Financing Models ...................................................................................... 17 3.1 CSP Value chain ................................................................................................................... 17 3.2 Financing Models ................................................................................................................ 20 3.2.1 Public – Private Partnership (PPP) ............................................................................... 20 3.2.2 Independent Power Producer (IPP) ............................................................................. 22 3.2.3 Green Bonds ................................................................................................................. 23 4 Analytical Framework ................................................................................................................. 25 4.1 Support mechanisms and Financing Models ...................................................................... 26 4.2 Impact of external parameters on financial data ................................................................ 26 4.3 Risks and Barriers ................................................................................................................ 27 4.4 Characteristics of CSP industry business models ................................................................ 28 4.5 Value created over the CSP value chain .............................................................................. 29 4.6 Strengthening local elements of the CSP value chain ......................................................... 29 5 Methodological Approach .......................................................................................................... 31 5.1 Literature survey ................................................................................................................. 31 5.2 Analytical Framework .......................................................................................................... 31 5.3 CSP Industry Survey ............................................................................................................. 32 6 Survey Results ............................................................................................................................. 33 iv 7 Financing Opportunities ............................................................................................................. 42 7.1 Innovation Fund .................................................................................................................. 43 7.2 Modernisation Fund ............................................................................................................ 44 7.3 Horizon 2020 ....................................................................................................................... 45 7.4 European Structural and Investment Funds ....................................................................... 45 7.5 InnovFin Energy Demonstration Projects ........................................................................... 46 7.6 European Funds for Strategic Investment .......................................................................... 46 8 Conclusions ................................................................................................................................. 48 9 References .................................................................................................................................. 51 10 Appendix ................................................................................................................................. 55 v FIGURES Figure 1: CSP Value Chain .................................................................................................................. 17 Figure 2: PPP typical structure ........................................................................................................... 21 Figure 3: IPP typical structure ............................................................................................................ 23 Figure 4: Bond project structure example ......................................................................................... 24 Figure 5: CSP companies’ experience with support mechanisms ..................................................... 33 Figure 6: Likelihood of engagement in future CSP projects, depending on the support mechanism ............................................................................................................................................................ 34 Figure 7: Debt ratio and support mechanisms .................................................................................. 34 Figure 8: Equity ratio and uncertainties ............................................................................................ 35 Figure 9: CSP industry experience with the financing models in place ............................................. 36 Figure 10: Impact of risk categories on the CSP industry’s decision making process ....................... 36 Figure 11: Probability of risk categories during project implementation.......................................... 37 Figure 12: Barriers affecting CSP project implementation so far .....................................................
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